A look at Steven Mnuchin's TikTok plans; sources say his proposal to buy TikTok without its export-blocked algorithm and rebuild it from scratch is far-fetched
His proposal to buy the app without its algorithm from its Chinese owner has drawn skeptical reactions, including from those he's pitched
Context & Ripple Effects
The proposal arrives after the House vote prompted Chinese officials to condemn U.S. treatment of TikTok, underscoring that a sale would involve more than a buyer and seller. TikTok had already floated a $1.5B U.S. operational reorganization with algorithm oversight to address concerns without a full separation.
Mnuchin had also sought a TikTok transaction that preserved some Chinese ownership in 2020. The renewed effort shows how the algorithm—rather than the app’s distribution alone—has become the central constraint in any ownership solution.
First-order effects
- A buyer pursuing TikTok without its existing recommendation system would face the immediate cost and execution risk of recreating the product’s core user experience, making Mnuchin’s proposed structure less credible to potential backers and counterparties.
- TikTok and its Chinese owner retain leverage over whether a transaction can include the technology that makes the service commercially distinctive; excluding it weakens the asset a buyer would acquire.
Second-order effects
- Other prospective bidders must either propose a structure that addresses the algorithm’s export restrictions or accept that a purchase could amount to a rebuild rather than an operating-platform acquisition. Frank McCourt’s later bid to buy and rebuild TikTok illustrates that alternative framing.
- The shortcomings of a clean technical separation make governance-based remedies more salient, though prior reporting found practical difficulty in algorithm oversight proposals as a way to assess possible influence.
Third-order effects
- If control of recommendation technology remains inseparable from cross-border ownership disputes, app divestitures may increasingly be judged by transferability of core models and data systems, not merely by ownership of a consumer brand.
- The case points to a broader split between formal ownership remedies and operational control: policymakers may demand separation while buyers confront the limits of substituting the product’s underlying technology.
The trend: TikTok is one instance of a larger trend in which recommendation algorithms are treated as strategic assets that complicate forced divestitures and cross-border platform governance.